October 2019 Wallace’s Farmer “MarketPlace Extra”
As I sit down to write this month’s article, I feel like I’m staring at the starting gates of a horse race, just waiting for the announcer to declare “And they’re off!” Normally by this time, we’ve already seen combines start to nose their way into fields across rural America but this year, everything has been just a little different. Later. Harder. And wetter. While every year is different, 2019 has been more different than most, and there’s likely to be some impact on the Iowa land market as we look back.
Coming into spring things were stable, and while all farms were moving, premium farms were selling best. With the meaningful move higher in early-summer commodity prices, stability continued. And as we entered August, the land market seemed to have strengthened just a bit. That strength was rooted in the belief that most of Iowa was growing an average-plus crop to go along with stronger commodity prices through much of the summer. The Iowa land market seemed positioned to benefit from the “tougher-sledding”, so to speak faced by our neighboring states, as there has been an expectation that 2019 would produce improved margins and overall profitability for Iowa farmers and landowners.
That market excitement has been tempered a bit over the past 30 days. The USDA statistics folks took some of the available oxygen from the commodity price rally in mid-August, based on their better-than-expected production numbers for the 2019 corn and soybean crops. There’s also the issue of weaker demand for our crops, which has created additional late-season commodity price pressure. Despite this, many participants in the Iowa farmland market still expect land price strength/support this fall. And, farmers still appear to be willing bidders at early-fall sales. While it won’t happen in every corner of the market, if the solid crop harvest materializes, I believe farmers are likely to crawl out of their combine cabs with a smile on their face. Some areas have struggled all year long, and for them, the idea of land market strength is crazy talk. But I believe those weak areas are more limited in the State of Iowa than in neighboring states, and I further believe that Iowa farmers will likely drive the broader Iowa farmland market into the plus column when we look back on the results of 2019.
There are currently many macro factors also in play across our farmland marketplace (e.g., interest rates, trade/tariff issues, MFP payments, etc.). I will plan to re-address some of those larger issues in next month’s column. For now, keep your eyes out for early fall auction results, and we will meet back here to talk again next month, as “the lead horse is hitting the 2nd turn”!
NORTHWEST
Palo Alto County:
85 +/- acres, located north of West Bend, recently sold at public auction for $10,600 per acre. The farm consisted of 85 +/- tillable acres with a CSR2 of 84.4, and equaled $125/CSR2 point on the tillable acres.
NORTH CENTRAL
Mitchell County:
155 +/- acres, located north of Mitchell, recently sold at public auction for $6,900 per acre. The farm consisted of 148.3 +/- tillable acres with a CSR2 of 81.9, and equaled $88/CSR2 point on the tillable acres.
NORTHEAST
Delaware County:
78 +/- acres, located north of Greeley, recently sold for $3,439 per acre. The farm consisted of 21 +/- tillable acres with a CSR2 of 25.5, and the balance of acres in timber and pastureland.
WEST CENTRAL
Shelby County:
79 +/- acres, located northwest of Portsmouth, recently sold at public auction for $8,100 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 58.4, and equaled $138/CSR2 point on the tillable acres.
CENTRAL
Hamilton County:
320 +/- acres, located west of Blairsburg, recently sold at public auction for $9,525 per acre. The farm was offered in 4 parcels and consisted of 311.52 +/- tillable acres with a CSR2 of 85.1. The sale equaled $115/CSR2 point on the tillable acres, and one buyer purchased all 4 parcels.
EAST CENTRAL
Muscatine County:
81 +/- acres, located southeast of Wilton, recently sold for $9,815 per acre. The farm consisted of 78 +/- tillable acres with a CSR2 of 94.1, and equaled $108/CSR2 point on the tillable acres.
SOUTHWEST
Pottawattamie County:
175 +/- acres, located southwest of Treynor, recently sold at public auction for $5,800 per acre. The farm consisted of 168 +/- tillable acres with a CSR2 of 64.4, and equaled $94/CSR2 point on the tillable acres.
SOUTH CENTRAL
Appanoose County:
44 +/- acres, located south of Unionville, recently sold at public auction for $3,750 per acre. The farm consisted of 38 +/- tillable acres with a CSR2 of 46.6, and equaled $93/CSR2 point on the tillable acres.
SOUTHEAST
Washington County:
68 +/- acres, located near Wellman, recently sold at public auction for $13,603 per acre. The farm consisted of 68 +/- tillable acres with a CSR2 of 84.0, and equaled $162/CSR2 point on the tillable acres.
Corrective Note: In the July 2019 column, a 146-acre sale in Hancock County, IA was referenced as selling for $9,247/acre, or $114/CSR2 point on the tillable acres. This was an error, as the $9,247/acre price was the asking price for the farm. The land actually sold for $8,600/acre, or $106/CSR2 point on the tillable acres. We apologize for the error.
Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500/800-593-5263 or visit www.Hertz.ag.
